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How your bank is like an annoying uncle

April 01, 2014

| MoneyRates.com Senior Financial Analyst, CFA

Banks today are trying to move with the times, with many using social media to communicate with their customers. In the process, are they becoming like the annoying uncle who insists on being Facebook friends with all his younger relatives?

Like the annoying uncle, banks that attempt to prove they are up on the latest technologies and trends often manage to come across as out of step and inappropriate. A customer survey by consulting firm Carlisle & Gallagher found that 87 percent found their bank's use of social media to be annoying, boring or unhelpful.

An uncomfortable presence

Part of this is simply a failure of execution -- most survey respondents found their bank's use of social media to be ineffective -- but perhaps the more fundamental issue is privacy. Sixty-eight percent of respondents say they would never use social media to discuss a problem with their bank, and 90 percent prefer to discuss such problems in private.

All of this will no doubt come as a disappointment to the vice president of social media that your bank recently hired.

The truth is, the best efforts of banks to appeal to customers are often off-target, which makes it crucial that you choose a bank according to your needs and preferences, and not according to what the bank chooses to highlight.

To focus your bank search on things that matter most to you, ask yourself the following when choosing a bank:

  1. Which technology is relevant? As the Carlisle & Gallagher study found, banks may be plowing a lot of money into social media campaigns that don't really matter to their customers. However, if you do most of your banking on the go, what may matter more is what mobile apps your bank has developed. Evaluate technology based on what you need -- not on what the bank happens to have.
  2. Does location matter? Branch networks are still a source of bragging rights for some banks, but if you do your banking online, you shouldn't care if your bank has one location or 1,000.
  3. Where can you access your money? Branches may be less relevant to today's banking customers, but ATMs still matter because you probably need some way of physically accessing your cash. If your bank's ATM network does not give you access to machines convenient to your regular travels, you could end up racking up extra fees with every transaction.
  4. How do you plan to use this bank? Some banks offer a massive array of products, but usually you are just looking for one or two. Why should you care about credit card offers when you are shopping for savings accounts? Does mortgage-lending matter to an apartment-dweller in need of a checking account? When choosing a bank, focus only on the products you plan to use in the near future, and tune out everything else.
  5. What are the relevant fees and rates? Once you have narrowed down which products matter to you, it should be much easier to make a decision based on a comparison of relevant terms, such as fees on checking accounts and interest rates on savings accounts.

In the end, you put up with that annoying uncle because, hey, he's family. After all, you don't get to choose your family. Fortunately, you do get to choose your bank.

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